Hugo Swire: Asia has the potential to be an engine of free trade globally

Asia has the potential to be an engine of free trade globally despite a recent slowdown in many of its markets, according to UK Foreign Office minister Hugo Swire.

The Minister of State at the Foreign and Commonwealth Office (FCO), who is responsible for the Asia Pacific and South Asia regions, made the optimistic remarks in his keynote speech at the Asian Business Leaders Award gala event held at Banqueting House which honoured top Malaysian banker CIMB Group chairman Nazir Razak for his impressive business credentials, contributions to the ASEAN (Association of Southeast Asian Nations) region and moral leadership.

“Clearly, there have been economic headwinds which have tempered some of the very impressive growth figures we have become accustomed to seeing. But nevertheless, Asia still has the potential to be an engine of free trade globally,” Mr Swire, MP for East Devon told the audience of business figures, politicians, ambassadors, High Commissioners and officials from Asia and the UK, at the gala dinner held to honour the 48-year-old.

“Of course, there is still more to do which is why the prime minister is campaigning to resolve important market access issues faced by British companies and urging partners to tackle corruption and improve transparency – both fundamental issues on which we need to work together to improve,” he said.

The ASEAN region and China have all witnessed a slowdown in recent months hit by falling commodity prices, weak exports, falling domestic consumer demand, a global slowdown and in some cases domestic politics.

The Chinese economy grew at an annual 6.9 percent in the third quarter of 2015 – its slowest growth since the first quarter of 2009. That was due to a slowdown in industrial output, weaker exports and stagnant property investment. Thailand’s GDP expanded just 2.80 percent in the second quarter of 2015 owing to private consumption and investment stalling. Malaysia’s GDP expanded just 4.90 percent in the second quarter of 2015, whilst Indonesia’s GDP expanded 4.67 percent.

Congratulating Mr Razak on winning the award, Mr Swire said: “I am delighted to congratulate Dato Sri Nazir Razak as the winner of the 2015 award, to add to his growing collection. This is an award not simply about success in business. It is an award about the way each individual has built their business into a success and how their personal success has enhanced society as a whole. Nazir has been rightly recognised as one of Malaysia’s top executives on numerous occasions. Under Nazir’s stewardship, CIMB Group has also won many awards in recent years including best investment bank, best bank in Malaysia and best Islamic bank in Asia.”

The Rt Hon Hugo Swire MP made a keynote speech at the Asian Business Leaders Award Dinner held at Banqueting House. Photo by Andy Tyler

The Asia House Asian Business Leaders Award 2015, held on 13 October, coincided with the birthday of the late British prime minister Margaret Thatcher (13 October, 1925), who Mr Swire pointed out had “staunchly supported free enterprise and did a huge amount to promote our relations with Asia.”

Mr Swire said that Mrs Thatcher, who passed away in 2013, would be “very pleased” if she could see the guests celebrating the success of top Malaysian executive in London.

Thirty years ago, in 1985, Mrs Thatcher became the first British Prime Minister to visit Malaysia since its independence, he said.

“At the end of her visit Mrs Thatcher noted three things about Malaysia,” he said. “That our economic philosophies have a great deal in common, that Malaysia is a land of opportunity, as well as immense potential and she was very struck by the friendliness of her welcome,” Mr Swire said.

He pointed out that Mr Cameron had followed in Mrs Thatcher’s footsteps by choosing to visit Malaysia, Indonesia, Singapore and Vietnam in the summer as his first post-election overseas visit outside Europe after his party won the 2015 general election, he said.

“He [David Cameron] was very clear that this part of the world would be a major priority for his government, and for good reason,” Mr Swire said.

Mr Swire also visited Malaysia in Februrary where he co-chaired the second Global Islamic Finance and Investment Group (GIFIG) meeting in Kuala Lumpur with Dr Zeti Akhtar Aziz, the governor of Malaysia’s central bank, Bank Negara Malaysia,  who he described as “formidable.” The purpose was to reaffirm the two countries’ leadership role in Islamic finance.

Mr Swire pointed out the UK was focused on this “extremely exciting sector” and in partnership with other countries like Malaysia, was devising and taking to market sharia-compliant financial products.

The UK was the first country outside the Islamic world to issue a sovereign Sukuk and Malaysia-headquartered CIMB Group were the Joint Leaders for the sale.

The British Government, which has stated its ambitions to make Britain a global hub of Islamic Finance, recently produced its very first brochure of sharia-compliant regeneration project opportunities across the UK.

Click below to see a slideshow of the Asian Business Leaders Award :–

Mr Swire told the audience that on that trip he had taken the opportunity to promote British businesses like Jaguar Land Rover and see for himself why Mrs Thatcher talked about “both the great opportunity and great potential of Malaysia.”

Bilateral trade between the UK and Malaysia totalled £4.605bn in 2013, an increase of 27 per cent from £3.629bn in 2009.

“Earlier this month – after nine years of negotiation – trade ministers from the 12 Trans Pacific Partnership countries reached agreement on an ambitious and far reaching deal set to impact on 40 per cent of world trade,” Mr Swire pointed out. “The long-term consequences of this could be hugely significant. My hope is that this will free up some of the region’s negotiators to focus intensively on the many EU deals we are trying to push.”

He said these deals the EU wanted to seal included FTAS with the ASEAN region, Indonesia, and the Philippines. The EU already has an FTA with South Korea; it has reached agreement with Singapore and is in negotiations Malaysia, Japan and Thailand.

Mr Cameron’s trip to Malaysia in July coincided with the agreement in principle of the EU-Vietnam FTA (free trade agreement), which will eliminate tariffs on 99 per cent of goods over a 10-year period.

Mr Swire concluded this was “an exciting and ambitious period in our relations with the region” and “a moment of great opportunity for our businesses. Britain is indeed back and we do indeed mean business.”

naomi.canton@asiahouse.co.uk

To read what Nazir Razak said in his speech after being presented with the Award click here.
To read what AirAsia’s Tony Fernandes said in his personal tribute to Nazir Razak click here.
To read more about the Asian Business Leaders Award 2015 click here.
To read an exclusive interview that Nazir Razak gave Asia House about the Malaysian economy click here. To read Nazir Razak’s views on ASEAN integration click here.